How Watchdog Standards Harm Good Charities

LETTERS TO THE EDITOR

To the Editor:

Ian Wilhelm exposes a disturbing truth in his article about inconsistencies in nonprofit evaluation (“Report Urges Charity-Watchdog Groups to Improve Rating Methods,” April 14). With standards all over the map, donors face an uncertain choice when deciding how to allocate their charitable donations.

Our recent experience illustrates the consequences of conflicting standards. On the advice of our independent auditors, in 2003 we applied the American Institute for Certified Public Accountants’ not-for-profit standard operating procedure known as Statement of Position 98-2, which governs the way costs are allocated. Our commitment to responsible stewardship and full disclosure places us in the vanguard of revising our method of allocations to comply with this procedure.

The resulting figures appear to suggest that our operating costs have increased while, in fact, they are essentially the same and the actual change is merely in the accounting method.

As a result of this cosmetic change, Charity Navigator downgraded our rating from four to three stars. At the same time, the Better Business Bureau’s Wise Giving Alliance applauded our financial transparency by acknowledging us as having met their detailed and exhaustive standards.

Donor confidence in the efficiency of a nonprofit is critical to its success.

Contrary to what Trent Stamp of Charity Navigator seems to believe, donor judgments are often based on a comparison of prospective recipient organizations. That those comparisons can be based on inaccurate or incomplete information provided by charity-rating services does a disservice not only to worthy organizations, but also to the donors who might otherwise support them. When this happens, we all lose.

Jeremy Deutchman
Director of Communications and Development
Mazon: A Jewish Response to Hunger
Los Angeles